Roland Oil Company v. Railroad Commission of Texas, 03-12-00247-CV

Roland Oil operated the North Charlotte Field Unit Lease (31 wells) since 1994; several wells were inactive and subject to Railroad Commission plugging/testing rules (former 16 Tex. Admin. Code §3.14).
Roland sought extensions in 2005 to complete required H-15/H-5 tests; Commission found longstanding noncompliance, issued a severance order, and barred production until testing/repairs were completed.
Roland ceased production May 2005 and resumed August 2006 (≈15 consecutive months); a mineral owner claimed the Lease lapsed during that non-production interval.
The Commission requires an operator seeking a plugging-extension to show a "good-faith claim" to continue operating the lease (e.g., a valid lease or recorded deed); staff asked Roland to prove that claim.
Roland relied on a 1962 Unit Agreement that continued while "Unit Operations" were conducted without a cessation of more than 90 days and contained a force majeure clause excusing performance for governmental orders or other causes beyond reasonable control.
After a contested-case hearing the Commission found Roland lacked a good-faith claim because production and Unit Operations ceased >90 days; it rejected Roland’s force majeure and Unit Operations arguments; the district court and this court affirmed.

Issue	Roland's Argument	Railroad Commission's Argument	Held
Whether the Commission's severance order triggered the Unit Agreement's force majeure clause and thus excused >90 days of nonproduction	The severance order is an "order of a governmental agency" within the clause, so the cessation was excused regardless of control	The clause requires the event be beyond the party's reasonable control; Roland’s regulatory noncompliance was within its control, so force majeure does not apply	Court held the clause is reasonably read to require events "beyond reasonable control"; force majeure did not apply to Roland’s circumstances, affirmed Commission
Whether repairs/testing Roland performed constituted "Unit Operations" that tolled the 90‑day cessation period	The repairs and testing (to comply with Commission rules) are "operations conducted by the Unit Operator" and thus qualify as Unit Operations to maintain the agreement	"Unit Operations" are limited to activities undertaken for development/operation to produce hydrocarbons; Roland’s work on inactive wells did not meaningfully contribute to production	Court held "Unit Operations" must be acts in a good‑faith effort to produce oil/gas; evidence supported Commission’s finding that Roland’s work did not constitute such operations; affirmed

Southeastern Pipe Line Co. v. Tichacek, 997 S.W.2d 166 (Tex. 1999) (explains unitization effects treating production/operations across unitized leases)
Magnolia Petroleum Co. v. Railroad Comm’n, 170 S.W.2d 189 (Tex. 1943) (agency may require showing of good‑faith claim to operate)
Coker v. Coker, 650 S.W.2d 391 (Tex. 1983) (unambiguous contract interpretation is a question of law)
Valence Operating Co. v. Dorsett, 164 S.W.3d 656 (Tex. 2005) (permits use of technical/industry meanings in contract terms)
Sun Operating Ltd. P’ship v. Holt, 984 S.W.2d 277 (Tex. App.—Amarillo 1998) (force majeure scope depends on contract language)
Hydrocarbon Mgmt., Inc. v. Tracker Exploration, Inc., 861 S.W.2d 427 (Tex. App.—Amarillo 1993) (discusses force majeure and lease‑operation concepts)